ENFORCING THE LAW AT GOVERNMENT OWNED OR OPERATED FACILITIES 

HOMONNAY, DR. A.

Director, Enviromark Ltd, P.O. Box 27, H-1453 Budapest, Hungary

SUMMARY

Under the circumstances of the command economy the interests of environmental protection were pushed into the background because of considerations underlying the socialist model of economic development. State decisions were enforced practically without opposition, which lead to a catastrophically high level of environmental pollution.

After the transformation of the economic and political system the necessary democratic procedures required for the settlement of conflicts between state, regional and local interests have not been formed yet. The enforcement of environmental protection interests is still very difficult because of the delay in the re-creation of the relevant legal regulations inherited from the previous regime, real or seemingly important sociological considerations and the still significant proportion of state owned companies.

The transformation of environmental legislation, its adjustment to EEC guidelines, and the establishment of the funding of environmental protection independently of the state budget are urgent necessities.

1    INTRODUCTION

In the West it has frequently been assumed that under the circumstances of a command economy and the dominance of state ownership it is extremely easy to harmonise interests and to enforce the law. Our experience however has proved that the exact opposite is the case. The merging of the state's economic and administrative functions in most cases resulted in the state's economic policies being based on ideological and strategical considerations, which led the national economy to disastrous consequences in the short term, while with regard to environmental protection it led to compromises which are now endangering our natural resources. In Hungary, which was the first country in Europe to pass strict laws on environmental protection (the Law on Water Resources), as well as regulations concerning the protection of the quality of water resources of 1961, which could have provided up-to-date legal guarantees in this respect, these laws nevertheless failed to fulfil their function because the state's political and economic structure did not allow the consistent enforcement of these regulations.

In fact, legal regulations were mercilessly enforced against private individuals, sometimes even overstepping the law's own limitations, while organisations owned by or entrusted to the state were to all intents and purposes above the law, as a result of the political standing of their leaders: they alone enjoyed all the advantages of the state's protectionist policies.

In order to be able to assess the impact of the changes that have recently taken place in the Hungarian proprietary system it is necessary to give a brief summary of the history of the environmental legislation which is still in effect today.

2    ENVIRONMENTAL LEGISLATION

The `buds' of environmental legislation were present as early as the Law on Water Resources which was prepared in the last century. This law assumed its up-to-date form in Law IV of 1964. One of the first legal regulations in Europe on the protection of the quality of water resources came into being in 1961. This regulation set the maximum limit for the issue of various types of sewage and prescribed a penalty fee for those exceeding these limits. This was modified several times later on, but an exclusive right of decision in these matters has always remained in the hands of the Chief Authority, governed in accordance with political (economico-political) or other considerations.

The first law on the protection of the environment, regulating the management of the individual elements of the environment as well as the utilisation of these overall, was passed in 1976. Separate laws regulated the protection of the quality of the air (1986), the conservation of the environment (1982), the management of dangerous waste (1981) and noise prevention (1983). Between 1964 and 1988 more than a hundred laws, including national standards, were indirectly concerned with environmental protection issues.

It was characteristic of the party state legislation system that laws on the same subject, but passed at different levels of the legal hierarchy, contained ambiguous or even contradictory regulations. In order to put an end to this a major overhaul began in 1987 and still remains to be completed.

It was characteristic of all legal regulations passed under the command economy system that they allowed not only legal and other necessary exceptions to the law, but also some which were dependent upon the economic and political leadership then in power.

A classic example of the above, in fact the subject of longstanding practice, was that the Head of the Hungarian Office of Water Affairs was entitled to reduce the amount of the penalty fee established by a court (he could in fact completely abolish it) if the penalty fee was more than the relevant company could afford to pay.

Another example of such anomalies, although in this case lacking any legal justification, is that drains owned by or entrusted to the state, even though they heavily polluted the environment, were for many years exempt from penalties, and when a legal process was initiated against them, the court established an unrealistically low penalty fee.

Similar cases could be cited from the area of legislation concerning the protection of air quality, too. The management of dangerous waste remained legally unregulated over a long period of time, and even when the relevant legislation was finally passed, it was not enforced against Soviet and Hungarian military and national defence organisations. The discovery of dangerous waste by external institutions was hindered by the fact that several of these establishments were managed under conditions of tight security. This meant that even if it was suspected that dangerous waste was not being managed in accordance with the relevant legal regulations no legal process or investigation could be initiated and consequently no penalty could be imposed on these establishments.

3    THE PRESENT SITUATION

After the commencement of the transformation of the political and economic system in Hungary the legislative system has also undergone both formal and substantial modification. In accordance with the legislative practice of parliamentary democracies; along with the fact that the range of Parliament's authority has significantly increased, codex type laws have now come to the forefront. 40 years of communism distorted all legal institutions, and thus virtually all legal regulations - from standards to laws - must be either modified or completely transformed. It is understandable that the supervision of legal regulations related to environmental protection has not yet been carried out and the new law on the environment has not been prepared despite the fact that the overall concept of the new law has already been worked out.

In the new situation establishments operating under the circumstances of a market economy and polluting the environment are subject to legal regulations established for a command economy, something which inevitably leads to a number of difficulties in the enforcement of the law. As a result of the transformation of the proprietary system ministerial decrees, formerly applied exclusively in relation to state owned legal entities (or legal regulations of a lower category) need to be extended and interpreted accordingly, which may occasionally raise the question of the legitimacy of these regulations. The preventive power of presently valid legal regulations has decreased, the system of environmental financing has not yet been formed and the financial situation of potential polluters - especially in the case of companies in which the state is still a majority proprietor - significantly hinders the enforcement of financial sanctions against them.

Those polluting the environment may be divided into three main groups in accordance with their form of ownership. The first group still continuing to cause the greatest amount of pollution are manufacturing and service providing companies in majority state ownership.

The second group consists of companies transferred and to be transferred into local council ownership. The range of companies in majority ownership is increasing. It is hardly at all possible to enforce environmetal requirements on the first group for which there are two main reasons:

1. Most manufacturing companies utilise out-dated technology, their sites are overloaded and they cannot afford to install the approapriate environmetal protection eqiupment.

2. Most state owned enterprises do not produce substantial profits, as a consequence of which they cannot accumulate resources and therefore they cannot afford to invest in nonprofit making activities. Because of their lack of their solvency financial sanctions against these companies remain inefficient. Despite of the above the maintenance of these companies is necessitated by certain other considerations.

Sources of pollution belonging to the second group are in a similar situation as those in the first group with the only difference that they are less subject to state preferences and therefore the enforcement of environmental requirements seems to be more likely for them. It must be noted however that the transfer of certain manufacturing and service companies into local council ownership began only a year ago and has not been completed yet. Consequently, certain extra legal considerations justify a certain period of moratorium with regard to them, with exception of outstandingly damaging sources of pollution, of course.

No sociological obstacles stand in the way of the enforcement of the law with regard to enterprises in majority private ownership because the state operating its administration does not have to take into consideration extra legal factors. It must be noted that newly formed private enterprises seldom utilise outdated technology. Most of them try to meet EEC standards from the commencement of their operations. In the case of a number of enterprises however the company's transformation into private ownership does not bring about the transformation of the relevant company's structure and technology in which case the polluting of the environment continues to take place. In such cases as these the taking of measures is perfectly feasible.

4    LEGAL MEASURES IN THE SERVICE OF THE ENFORCEMENT OF ENVIRONMENTAL INTERESTS

The only measures presently available for the enforcement of environmental requirements are those left behind by the previous regime.

4.1 Standards

The working out of standards serving the enforcement of environmental requirements has already begun but this activity is at present restricted mainly to emissions and methods of their measurement. Technological standards concerning individual branches of industry and the service sector have not yet been worked out. The adoption of EEC guidelines is in process.

4.2 Criminal law

The Law on Environmental Protection and the Criminal Code contain the notion of environmental crime but the legal elements of this crime have yet to be given a detailed interpretation. With the exception of a number of outstandingly serious cases institutions dealing with criminal matters have not reported on such cases officially. In order to be able to enforce the law the offence must be specified by the legislator in detail in order to make possible its prosecution if serious damage has been caused to the environment even if no harm has been inflicted upon human life, health and property.

4.3 Licensing

The most important measure serving the enforcement of environmental requirements is licensing which looks back upon a relatively long history in Hungary. Activities influencing the natural condition of water resources could not be conducted without a license after the Law on Water Resources was adopted in the last century. Later the Law on Environmental Protection made licensing obligatory for the utilisation of air and soil too. The requirement of a license in order to be able to conduct activities influencing the condition of the environment however failed to improve it. Deviation from the practice and unlicensed activities were sanctioned only by the imposition of penalty fees. It was also difficult to control the fulfillment of conditions laid down in these licenses. In several cases the establishment of sewage purifying or smoke filtering equipment was prescribed by the environmental authorities and although these were either not installed at all or their quality failed to meet the relevant standards. The authorities did not take further measures against these manufacturing or service activities.

In the course of the updating of the system of legal regulations concerning environmental protection the rules of sanctioning will presumably also be modified.

4.4 Penalty Fees

The most efficient legal measure serving the enforcement of environmental protection interests has been and still is administrative penalties despite all the defects related to this measure . The most important penalties are for air pollution and sewage emission.

Penalties for sewage emission were first regulated in 1961. This regulation has been modified several times since then and at present this regulation prescribes 30 various limitations in this respect regulating the quality of sewage which may be emitted. The limit values prescribed by the regulations depend on the protection category of water resources and the penalties to be imposed may be increased or decreased by several modifying factors.

Despite the classification of emission limit values as described above local circumstances and the level of `saturation' of the environment were taken into consideration hardly at all and this system failed to promote the transformation of technologies used by companies polluting the environment.

Basically the same can be said in relation to penalties for air pollution.

It is certainly true that as a result of the imposition of penalties the increase of the level of environmental pollution came to a halt. This process was noticeable primarily in the case of industrial companies.

5    ORGANIZATION

Until the 1970s the protection of the environment had been basically restricted to the protection of the quality of water resources. The Hungarian Environmental Council, later Environmental Office, commenced its activities as an independent organisation. Later, having merged with the Hungarian Office of Water Management, the Hungarian Environmental Office continued its activities until 1989 as the Ministry of Environment and Water Management, when, as a result of the transformation process, water management affairs were transferred to the Ministry of Transport, Telecommunications and Water Management. Regional development was transferred to the Ministry of Environment.

The separation of water management affairs from the Ministry of Environment seems to be a mistake, because it has resulted in ambiguities with regard to executive activities as well as the distribution of the range of authorities belonging to these two spheres. Parallel ranges of authority and procedures have been formed as a result of this decision, which has led to an increase in administrative expenses related to environmental protection and water management, significantly increased staffing levels, and at the same time, because of the division of authorities between the two spheres, brought about the decrease of the efficiency of their activities.

Before the transformation of the economic and political system public opinion could not be enforced with regard to the licensing of industrial activities affecting the environment as a result of the lack of organisational conditions necessary for the enforcement of local interests. The attitude of the command economy was the reason behind such a situation, because it did not allow the enforcement of alternatives different from the considerations of central planning. After the transformation process the situation has fundamentally changed. It is a well known fact that under the previous regime the opposition's first activities were centered around the issue of environmental protection. Similarly, after the completion of the transformation process signs of democratisation first became evident in the course of public debates concerning environmental protection. Despite this, because of the lack of a proper organisational framework as well as the underdevelopedness of democratic procedures in local councils, the general public has participated in the actual effective decisionmaking process only with great difficulty and in many cases, unfortunately, with a negative effect. It is especially true in relation to cases where the state tries to implement investment serving the interests of the country as a whole against local interests, including the storage of dangerous waste, the planned locations of which could not be established because of the opposition of the local population.